ARTICLE 1. Assignments for Benefit of Creditors.
§§ 23-1 through 23-12: Repealed by Session Laws 2020-75, s. 2(a), effective January 1, 2021, and applicable to receiverships commenced on or after that date.
(G.S. 23-1: 1893, c. 453; Rev., s. 967; 1909, c. 918, s. 1; C.S., s. 1609; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-2: 1893, c. 453, s. 2; Rev., s. 968; C.S., s. 1610; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-3: 1909, c. 918, s. 2; C.S., s. 1611; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-4: 1915, c. 176, s. 1; C.S., s. 1612; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-5: 1893, c. 453, s. 3; Rev., s. 969; C.S., s. 1613; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-6: 1909, c. 918, s. 3; C.S., s. 1614; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-7: 1893, c. 453, s. 3; Rev., s. 970; 1909, c. 918, s. 4; 1915, c. 176, s. 2; C.S., s. 1615; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-8: 1893, c. 453, s. 4; Rev., s. 971; C.S., s. 1616; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-9: 1893, c. 453, ss. 6, 7; Rev., ss. 972, 3617; C.S., s. 1617; 1993, c. 539, s. 397; 1994, Ex. Sess., c. 14, s. 34; c. 24, s. 14(c); repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-10: 1909, c. 918, s. 5; C.S., s. 1618; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-11: 1893, c. 453, s. 5; Rev., s. 973; C.S., s. 1619; repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-12: 1893, c. 453, s. 8; Rev., s. 3689; C.S., s. 1620; 1993, c. 539, s. 398; 1994, Ex. Sess., c. 24, s. 14(c); repealed by 2020-75, s. 2(a), effective January 1, 2021.)
Editor's Note. - Former G.S. 23-1 pertained to debts mature on execution of assignment; no preferences. Former G.S. 23-2 pertained to trustee to file schedule of property. Former G.S. 23-3 pertained to trustee to recover property conveyed fraudulently or in preference. Former G.S. 23-4 pertained to substitute for incompetent trustee appointed in special proceeding. Former G.S. 23-5 pertained to insolvent trustee removed unless bond given; substitute appointed. Former G.S. 23-6 pertained to trustee removed on petition of creditors; substitute appointed. Former G.S. 23-7 pertained to substituted trustee to give bond. Former G.S. 23-8 pertained to only perishable property sold within ten days of registration. Former G.S. 23-9 pertained to creditors to file verified claims with clerk; false swearing misdemeanor. Former G.S. 23-10 pertained to priority of payments by trustee. Former G.S. 23-11 pertained to trustee to account quarterly; final account in twelve months. Former G.S. 23-12 pertained to Trustee violating duties guilty of misdemeanor.
ARTICLE 2. Petition of Insolvent for Assignment for Creditors.
§§ 23-13 through 23-17: Repealed by Session Laws 2020-75, s. 2(a), effective January 1, 2021, and applicable to receiverships commenced on or after that date.
(G.S. 23-13: 1868-9, c. 162, ss. 1, 2, 3; Code, ss. 2942, 2943, 2944; Rev., s. 1930; C.S., s. 1621, repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-14: 1868-9, c. 162, ss. 4, 5; Code, ss. 2945, 2946; Rev., s. 1931; C.S., s. 1622, repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-15: 1868-9, c. 162, s. 6; Code, s. 2947; Rev., s. 1932; C.S., s. 1623, repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-16: 1868-9, c. 162, s. 9; Code, s. 2950; Rev., s. 1933; C.S., s. 1624, repealed by 2020-75, s. 2(a), effective January 1, 2021. G.S. 23-17: 1868-9, c. 162, s. 7; Code, s. 2948; Rev., s. 1934; C.S., s. 1625, repealed by 2020-75, s. 2(a), effective January 1, 2021.)
Editor's Note. - Former G.S. 23-13 pertained to petition; schedule; inventory; affidavit. Former G.S. 23-14 pertained to clerk to give notice of petition. Former G.S. 23-15 pertained to order of discharge and appointment of trustee. Former G.S. 23-16 pertained to terms and effect of order of discharge. Former G.S. 23-17 pertained to suggestion of fraud by opposing creditor.
ARTICLE 3. Trustee for Estate of Debtor Imprisoned for Crime.
§ 23-18. Persons who may apply for trustee for imprisoned debtor.
When any debtor is imprisoned in the penitentiary for any term, or in a county jail for any term more than 12 months, application by petition may be made by any creditor, the debtor, or by his or her spouse, or any of his or her relatives, for the appointment of a trustee to take charge of the estate of such debtor.
(1868-9, c. 162, s. 40; Code, s. 2974; Rev., s. 1943; C.S., s. 1626; 1977, c. 549.)
§ 23-19. Superior court appoints; copy of sentence to be produced.
The application must be made to the superior court of the county where the debtor was convicted, and upon producing a copy of the sentence of such debtor, duly certified by the clerk of the court, together with an affidavit of the applicant that such debtor is actually imprisoned under such sentence, and is indebted in any sum, the clerk or the judge may immediately appoint a trustee of the estate of such debtor.
(1868-9, c. 162, ss. 41, 42; Code, s. 2975; Rev., s. 1944; C.S., s. 1627.)
§ 23-20. Duties of trustee; accounting; oath.
The trustee of the imprisoned debtor shall pay his debts pro rata. After paying such debts, the trustee shall apply the surplus, from time to time, to the support of the wife and children of the debtor, under the direction of the superior court. When the imprisoned debtor is lawfully discharged from his imprisonment, the trustee shall deliver to him all the estate, real and personal, of such debtor, after retaining a sufficient sum to satisfy the expenses incurred in the execution of the trust and lawful commissions therefor. The trustee shall make his returns and have his accounts audited and settled by the clerk of the superior court of the county where the proceeding was had, in like manner as provided for personal representatives. Before proceeding to the discharge of his duty, the trustee shall take and subscribe an oath, well and truly to execute his trust according to his best skill and understanding. The oath must be filed with the clerk of the superior court.
(1868-9, c. 162, ss. 43, 45, 46; Code, ss. 2976, 2978, 2979; Rev., ss. 1945, 1946, 1947; C.S., s. 1628.)
§ 23-21. Court may appoint several trustees.
The court has power, when deemed necessary, to appoint more than one person trustee under this chapter; but in reference to the rights, authorities and duties conferred herein, all such trustees shall be deemed one person in law.
(1868-9, c. 162, s. 47; Code, s. 2980; Rev., s. 1948; C.S., s. 1629.)
§ 23-22. Court may remove trustee and appoint successor.
In case of the death, removal, resignation or other disability of a trustee, the court making the appointment may from time to time supply the vacancy; and all proceedings may be continued by the successor in office in like manner as in the first instance.
(1868-9, c. 162, s. 48; Code, s. 2981; Rev., s. 1949; C.S., s. 1630.)
ARTICLE 4. Discharge of Insolvent Debtors.
§ 23-23. Insolvent debtor's oath.
Prisoners in order to be entitled to discharge from imprisonment under the provisions of this article shall take the following oath:
I, ________, do solemnly swear (or affirm) that I have not the worth of fifty dollars in any worldly substance, in debts, money or otherwise whatsoever, and that I have not at any time since my imprisonment or before, directly or indirectly, sold or assigned, or otherwise disposed of, or made over in trust for myself or my family, any part of my real or personal estate, whereby to have or expect any benefit, or to defraud any of my creditors: so help me, God.
(1773, c. 100, s. 1, P.R.; 1808, c. 746, s. 2, P.R.; 1810, cc. 797, 802, P.R.; 1830, c. 33; 1838, c. 23; 1840, cc. 33, 34; 1852, c. 49; R.C., c. 59, s. 1; 1868-9, c. 162, s. 31; 1881, c. 76; Code, s. 2972; Rev., s. 1918a; C.S., s. 1631.)
Constitutionality. - This section does not contravene the constitutional provision in regard to homestead and personal property exemptions, as the prisoner can discharge himself from custody by paying the fine and costs or by complying with the provisions
of this article and taking the oath prescribed. State v. Williams, 97 N.C. 414, 2 S.E. 370 (1887).
Liberal Construction. - In Wood v. Wood, 61 N.C. 538 (1868), it is stated that chapter 59 of the Revised Code (the provisions of which are contained in this Article) has always received a liberal interpretation.
Debtor Must Follow Provisions. - When a person is taken by authority of an execution against his person by virtue of the provisions of G.S. 1-311, he can be discharged from imprisonment only by payment or by giving notice and surrender of all his property
in excess of $50.00 as provided in this section and G.S. 23-30 through 23-38. Allred v. Graves, 261 N.C. 31, 134 S.E.2d 186 (1964).
Cited in Moorefield v. Roseman, 198 N.C. 805, 153 S.E. 399 (1930).
§ 23-24. Persons imprisoned for nonpayment of costs in criminal cases.
The following persons may be discharged from imprisonment upon complying with this article and G.S. 153-194:
Every person committed for the fine and costs of any criminal prosecution.
(1773, c. 100, s. 1, P.R.; 1808, c. 746, s. 2, P.R.; 1810, cc. 797, 802, P.R.; 1830, c. 33; 1838, c. 23; 1840, cc. 33, 34; 1852, c. 49; R.C., c. 59, s. 1; 1868-9, c. 162, s. 26; Code, s. 2967; Rev., s. 1915; C.S., s. 1632; 1933, c. 228, s. 9.)
Editor's Note. - Section 153-194, referred to in this section, was transferred to G.S. 162-45 by Session Laws 1973, c. 822, s. 3. The section was repealed by Session Laws 1977, c. 711, s. 33.
Legal Periodicals. - For note on imprisonment of an indigent at low per diem rate for failure to pay fine, see 6 Wake Forest Intra. L. Rev. 509 (1970).
Purpose of Section. - This section was manifestly intended to be construed as permitting a defendant convicted in a criminal proceeding, or found to be the father of an illegitimate child, to file a petition before the clerk designating the time when
he wished to apply for a discharge. State v. Parsons, 115 N.C. 730, 20 S.E. 511 (1894).
Person Committed for Fine and Costs May Be Discharged. - One committed for the fine and costs of a criminal prosecution, after remaining in jail twenty days, may be discharged upon complying with provisions of G.S. 23-25. State v. Davis,
82 N.C. 610 (1880).
Where Prisoner Was Found Guilty on Three Indictments. - There were three indictments against a prisoner to one of which he pleaded guilty, and judgment was suspended on the payment of costs, and he was found guilty on the other two, on one of which he
was sentenced to imprisonment for ten days. After remaining in jail for the term of his imprisonment and twenty days additional, the prisoner took the oath prescribed and applied for his discharge; it was held, that he was entitled
to his discharge in all three cases. State v. McNeely, 92 N.C. 829 (1885).
Cited in State v. Williams, 97 N.C. 414, 2 S.E. 370 (1887); State v. Morgan, 141 N.C. 726, 53 S.E. 142 (1906); State v. Bradshaw, 214 N.C. 5,
197 S.E. 564 (1938); State v. Bryant, 251 N.C. 423, 111 S.E.2d 591 (1959).
§ 23-25. Petition; before whom; notice; service.
Every such person, having remained in prison for 20 days, may apply by petition to the court where the judgment against him was entered, praying to be brought before such court at a time and place to be named in the petition, and to be discharged upon taking the oath hereinbefore prescribed. The applicant shall cause 10 days' notice of the time and place of filing the petition to be served on the sheriff or other officer by whom he was committed. In cases of conviction before a magistrate the clerk of the superior court of the county where the convicted person confined for costs is, may administer the oath and discharge the prisoner.
(1773, c. 100, s. 1, P.R.; 1808, c. 746, s. 2, P.R.; 1810, cc. 797, 802, P.R.; 1830, c. 33; 1838, c. 23; 1840, cc. 33, 34; 1852, c. 49; R.C., c. 59, s. 1; 1868-9, c. 162, ss. 27, 28; 1873-4, c. 90; 1874-5, c. 11; Code, ss. 2968, 2969; 1891, c. 195; Rev., s. 1916; C.S., s. 1633; 1971, c. 1190, s. 1.)
Insolvent's Application Is Proceeding in Cause in Which Convicted. - The application of an insolvent confined for the nonpayment of costs is a proceeding in the cause in which he was convicted, and should be made by petition to the court wherein the judgment
against him was entered. State v. Miller, 97 N.C. 451, 1 S.E. 776 (1887).
Prisoner May Appeal to Judge If Clerk Refuses to Give Oath. - If the clerk should refuse to allow the prisoner to take the oath, the remedy is by an appeal to the judge holding the courts of that district. State v. Miller,
97 N.C. 451, 1 S.E. 776 (1887), intimating that release of prisoner on writ of habeas corpus by judge of adjoining district is irregular.
Twenty-Day Provision Is Mandatory. - Whether a defendant has property or not, he must remain in jail the twenty days, or pay the fine and costs, since the officers could not waive the imprisonment, nor had the judge the power to dispense with it. State v. Davis, 82 N.C. 610 (1880).
Neither the judge nor solicitor has the right to allow a defendant to take the insolvent's oath and obtain his discharge without remaining in prison for twenty days. State v. Bryan, 83 N.C. 611 (1880).
§ 23-26. Warrant issued for prisoner.
The clerk of the superior court before whom such petition is presented shall forthwith issue a warrant to the sheriff, or keeper of the prison, requiring him to bring the prisoner before the court, at the time and place named for the hearing of the case, which warrant every such sheriff or keeper shall obey.
(1773, c. 100, s. 1, P.R.; 1808, c. 746, s. 2, P.R.; 1810, cc. 797, 802, P.R.; 1830, c. 33; 1838, c. 23; 1840, cc. 33, 34; 1852, c. 49; R.C., c. 59, s. 1; 1868-9, c. 162, s. 29; Code, s. 2970; Rev., s. 1917; C.S., s. 1634; 1971, c. 1190, s. 2.)
§ 23-27. Proceeding on application.
At the hearing of the petition, if the prisoner has no visible estate, and takes and subscribes the oath or affirmation prescribed in this Article, the clerk of the superior court before whom he is brought, shall administer the oath or affirmation to him, and discharge him from imprisonment, of which an entry shall be made in the docket of the court.
(1773, c. 100, s. 1, P.R.; 1808, c. 746, s. 2, P.R.; 1810, cc. 797, 802, P.R.; 1830, c. 33; 1838, c. 23; 1840, cc. 33, 34; 1852, c. 49; R.C., c. 59, s. 1; 1868-9, c. 162, s. 30; Code, s. 2971; Rev., s. 1918; C.S., s. 1635; 1971, c. 1190, s. 3.)
§ 23-28. Suggestion of fraud.
The chairman of the board of commissioners, and every officer interested in the fee bill taxed against such prisoner, may oppose his taking the insolvent debtor's oath above prescribed, and file particulars of the suggestion in writing, in the court where the same shall stand for trial as prescribed in this chapter in other cases of fraud or concealment.
(1868-9, c. 162, s. 32; Code, s. 2973; Rev., s. 1919; C.S., s. 1636.)
§ 23-29. Persons taken in arrest and bail proceedings, or in execution.
The following persons also are entitled to the benefit of this article as hereinafter provided:
- Every person taken or charged on any order of arrest for default of bail, or on surrender of bail in any action.
- Every person taken or charged in execution of arrest for any debt or damages rendered in any action whatever.
(1868-9, c. 162, s. 10; Code, s. 2951; Rev., s. 1920; C.S., s. 1637; 1967, c. 24, s. 5; c. 1078.)
Cross References. - As to arrest and bail, see G.S. 1-409 to 1-439.
Construed with G.S. 1-417 and G.S. 1-419. - This section should be construed with G.S. 1-417 and G.S. 1-419, and, so construed, the remedies given by this section are in addition to those given by the other sections mentioned. Edwards v. Sorrell,
150 N.C. 712, 64 S.E. 898 (1909).
Persons Within Scope of Section. - The terms of this section are as broad and sweeping as they well can be. They do not, in any view of them as to the purpose intended, imply limitation or discrimination. They plainly embrace "every person" taken or charged to be arrested by virtue of "any order of arrest," not specially for a tort, or for fraud, or other particular cause of action as to which a person may be arrested, but for any cause of action, no matter what may be its nature, if the person is arrested in a case wherein he may lawfully be so arrested. They, in plain, strong terms, embrace any such arrest made or ordered to be made in any action whatever - that is, an action in which a person - a party - may be so arrested. Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
The provisions of this section are broad and strong, and plainly extend to and embrace every person who may be arrested by virtue of an order of arrest issued pursuant to the provisions of G.S. 1-410, and also extend to and embrace every person who has been seized by virtue of an execution against his person by authority of the provisions of G.S. 1-311. Allred v. Graves, 261 N.C. 31, 134 S.E.2d 186 (1964).
The benefits of this section extend as well to those arrested for torts as for debt, and the debt growing out of one is no more a debt and no more entitled to an extraordinary process for its collection than the other. Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
The provisions of this section extend to and embrace every person arrested or to be arrested in a civil action on account of any cause of action specified in G.S. 1-410. Burgwyn v. Hall, 108 N.C. 489,
13 S.E. 222 (1891).
Nonresidents Are Included. - The benefits of the section are not confined to residents of this State. There is no provision in it, or any other statute, within our knowledge, that in terms or by reasonable implication declares that a nonresident shall
not be discharged from arrest in a civil action, if he makes the complete surrender of his estate as prescribed. Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
Discharge May Be Sought After Motion to Vacate Arrest Denied. - Where a party is under arrest in a civil action and his motion to vacate the arrest has been denied, he may seek his discharge under the provisions of this section. Wing v. Hooper,
98 N.C. 482, 4 S.E. 463 (1887).
But Exempt Property over $50 Must Be Surrendered. - A judgment debtor against whose person execution has been issued cannot be discharged except by payment, or giving notice and surrender of all property in excess of $50, and the effect of the execution
against the person is to deprive him of his homestead and his personal property exemption over and above $50. Oakley v. Lasater, 172 N.C. 96, 89 S.E. 1063 (1916).
Cited in Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977).
§ 23-30. When petition may be filed.
Every person taken or charged as in the preceding section [§ 23-29] specified may, at any time after his arrest or imprisonment, petition the court from which the process issued on which he is arrested or imprisoned, for his discharge therefrom, on his compliance with this chapter.
(R.C., c. 59, s. 3; 1868-9, c. 162, s. 11; Code, s. 2952; Rev., s. 1921; C.S., s. 1638.)
Persons Included. - This section in the broadest terms embraces "every person taken or charged as in the preceding section specified." Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
Cause of Action Immaterial. - The debtor is entitled to be discharged upon the honest surrender of his property in the way prescribed, whether the cause of action on account of which he was arrested was a fraudulent debt, or a tort, or of other nature
as to which he might be arrested. Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
§ 23-30.1. Provisional release.
Every person who has filed a petition under the provisions of G.S. 23-30 shall be brought before a judge within 72 hours after filing the petition and shall be provisionally released from imprisonment unless a hearing shall be held and the creditor shall establish that the prisoner has fraudulently concealed assets. If, at the time he is brought before a judge, the prisoner makes a showing of indigency, counsel shall be appointed for the prisoner in accordance with rules adopted by the Office of Indigent Defense Services. A provisional release under this section shall not constitute a discharge of the debtor, and the creditor may oppose the discharge by suggesting fraud even if he has unsuccessfully attempted to oppose the provisional release on the basis of fraudulent concealment. The debtor may be provisionally released even though actual service upon the creditor has not been accomplished if 72 hours has passed since the debtor delivered the notice to the sheriff for service upon the creditor.
(1977, c. 649, s. 5; 2000-144, s. 32; 2001-487, s. 13.)
Cross References. - For the Indigent Defense Services Act, see Chapter 7A, Subchapter IX, Article 39B, G.S. 7A-498 et seq.
Legal Periodicals. - For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).
§ 23-31. Petition; contents; verification.
The petition shall set forth cause of the imprisonment, with the writ or process and complaint on which the same is founded, and shall have annexed to it a just and true account of all his estate, real and personal, and of all charges affecting such estate, as they exist at the time of filing his petition, together with all deeds, securities, books or writings whatever relating to the estate and the charges thereon; and also what property, real and personal, the petitioner claims as exempt from sale under execution, and shall have annexed to it on oath or affirmation, subscribed by the petitioner and taken before any person authorized by law to administer oaths, to the effect following:
I, ________, the within named petitioner, do swear (or affirm) that the within petition and account of my estate, and of the charges thereon, are, in all respects, just and true; and that I have not at any time or in any manner disposed of or made over any part of my property, with a view to the future benefit of myself or my family, or with an intent to injure or defraud any of my creditors: so help me, God.
(R.C., c. 59, s. 3; 1868-9, c. 162, ss. 12, 13; Code, ss. 2953, 2954; Rev., s. 1922; C.S., s. 1639.)
§ 23-32. Notice; length of notice and to whom given.
Twenty days notice of the time and place at which the petition will be filed, together with a copy of such petition and the account annexed thereto, shall be personally served by such debtor on the creditor or creditors at whose suit he is arrested or imprisoned, and such other creditors as the debtor may choose, or their personal representatives or attorneys. If the person to be notified reside out of the State, and has no agent or attorney in the State, the notice may be served on the officer having the claim to collect, or by two weekly publications in any newspaper in the State.
(1773, c. 100, s. 8, P.R.; R.C., c. 59, ss. 3, 20; 1868-9, c. 162, s. 14; Code, s. 2955; Rev., s. 1923; C.S., s. 1640.)
Constitutionality. - The 20-day notice requirement of this section is constitutionally deficient and may not be enforced. Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473 (1977).
This section postpones unconscionably and unconstitutionally, as a violation of procedural due process, the right of one imprisoned to have his day in court. Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473 (1977).
Reasonable Notice to Be Required Pending Legislative Correction of Constitutional Infirmity. - See Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473 (1977).
Only Creditors Notified Are Affected. - The party arrested and seeking relief must notify the creditors or plaintiff at whose suit he is arrested, but he may or may not notify other creditors of his application to surrender his property and be discharged
from arrest, and only such creditors as may be so notified will be affected by his discharge. Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
§ 23-33. Who may suggest fraud.
Every creditor upon whom the notice directed in G.S. 23-32 is served may suggest fraud upon the hearing of the petition, and the issues made up respecting the fraud shall stand for trial as in other cases.
(1822, c. 1131, s. 4, P.R.; 1835, c. 12; R.C., c. 59, s. 13; 1868-9, c. 162, s. 15; Code, s. 2956; Rev., s. 1924; C.S., s. 1641.)
Petitioner May Demand Oath and Jury Trial. - A petitioner is entitled to insist that suggestions of fraud, made by a creditor, shall be verified by the oath of the creditor and tried by a jury; and it is error in a judge to decide upon such suggestions,
without submitting them in an issue to a jury. Purvis v. Robinson & Co., 49 N.C. 96 (1856). See also, State v. Carroll, 51 N.C. 458 (1859).
§ 23-34. Where no suggestion of fraud, discharge granted.
If no creditor suggests fraud or opposes the discharge of the debtor, the clerk of the superior court before whom the petition is heard shall forthwith discharge the debtor, and, if he surrenders any estate for the benefit of his creditors, shall appoint a trustee of such estate. The order of discharge and appointment shall be entered in the docket of the court.
(1773, c. 100, P.R.; 1808, c. 746, s. 2, P.R.; 1810, cc. 797, 802, P.R.; 1830, c. 33; 1838, c. 23; 1840, cc. 33, 34; 1852, c. 49; R.C., c. 59, s. 1; 1868-9, c. 162, s. 16; Code, s. 2957; Rev., s. 1925; C.S., s. 1642; 1971, c. 1190, s. 4.)
Discharge Held Improper. - Where a debtor arrested and imprisoned for fraud did not tender the oath required by G.S. 23-23, nor surrender his homestead and personal property exemptions, nor file the petition, nor give the notice required by G.S. 23-32,
he was improperly discharged upon an affidavit that he had theretofore made an assignment of all his property for the benefit of creditors and that he was at the date of the affidavit insolvent and not worth more than the exemptions
allowed him by law as set apart to him. Raisin Fertilizer Co. v. Grubbs, 114 N.C. 470, 19 S.E. 597 (1894).
Proper Remedy to Secure Tort Damages. - The proper remedy of the party seeking to establish and secure his damages for tort is to have a trustee appointed, under this section, to hold and distribute among creditors when and as soon as all debts are ascertained.
Burgwyn v. Hall, 108 N.C. 489, 13 S.E. 222 (1891).
Applied in Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977).
§ 23-35. Continuance granted for cause.
When it appears to the court that any debtor, who may have given bond for his appearance under this chapter, is prevented from attending court by sickness or other sufficient cause, the case shall be continued to another day, or to the next term, when the same proceedings shall be had as if the debtor had appeared according to the condition of his bond, and in the event of his death in the meantime, his bond shall be discharged.
(1822, c. 1131, s. 1, P.R.; R.C., c. 59, s. 10; 1868-9, c. 162, s. 18; Code, s. 2959; Rev., s. 1926; C.S., s. 1643.)
Cross References. - As to the insolvent's bond, see G.S. 23-40.
The extreme sickness of the principal would excuse his nonappearance, and entitle him and his surety to a continuance if that appeared to the court. But where it was not made to appear, the court could not properly continue it. Buis v. Arnold,
53 N.C. 233 (1860).
But Not Sickness of Surety. - Under this section the sickness of the surety is no excuse for the default of the principal. Speight v. Wooten, 14 N.C. 327 (1832).
§ 23-36. Where fraud in issue, discharge only after trial.
After an issue of fraud or concealment is made up, the debtor shall not discharge himself as to the creditors in that issue, except by trial and verdict in the same, or by a discharge by consent.
(R.C., c. 59, s. 17; 1868-9, c. 162, s. 21; Code, s. 2962; Rev., s. 1927; C.S., s. 1644.)
This section only applies to cases where the defendant is in lawful custody and by virtue of an authority competent to order it. Houston & Co. v. Walsh, 79 N.C. 35 (1878).
Applied in Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977).
§ 23-37. If fraud found, debtor imprisoned.
If, on the trial, the jury finds that there is any fraud or concealment, the judgment shall be that the debtor be imprisoned until a full and fair disclosure and account of all his money, property or effects be made by the debtor.
(1822, c. 1131, s. 4, P.R.; 1835, c. 12; R.C., c. 59, s. 14; 1868-9, c. 162, s. 20; Code, s. 2961; Rev., s. 1928; C.S., s. 1645.)
Must Surrender Property Fraudulently Conveyed. - An insolvent debtor included in his schedule "all his interest in certain property assigned to S.C." On an issue found, the jury found the deed assigning such property fraudulent. It was held that the debtor
should be imprisoned until he should make a surrender of the whole of such property. Hutton v. Self, 28 N.C. 285 (1846).
Not in Execution as to Other Creditor. - A debtor convicted of fraudulent concealment of his effects, upon an issue between him and A, and ordered into custody thereupon, according to this section, is not in execution at the suit of B, another creditor,
in whose case no such concealment was found or suggested. Folsom v. Gregory, 12 N.C. 233 (1827).
Applied in Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977).
§ 23-38. Effect of order of discharge.
The order of discharge under any Article of this Chapter, whether granted upon a nonsuggestion of fraud, upon the finding of a jury in favor of the debtor, or otherwise, shall declare that the debtor shall forever thereafter be exempted from arrest or imprisonment on account of any judgment, or by reason of any debt due at the time of such order, or contracted for before that time though payable afterwards, except that (i) no debt, demand, judgment, or decree against a debtor who is discharged under this Chapter shall be affected or impaired by the discharge, but the same shall remain valid and effective against all of the property of the debtor acquired after discharge and the appointment of a trustee, and the lien or any judgment or decree upon the property of the debtor shall not in any manner be affected by the discharge and (ii) the body of such debtor shall be free from arrest or imprisonment at the suit of every creditor, and as to him only, to whom the notice required may have been given; and the notices, or copies thereof, shall in all cases be filed in the office of the superior court clerk.
(1822, c. 1131, s. 4, P.R.; 1835, c. 12; R.C., c. 59, s. 11; 1868-9, c. 162, s. 19; Code, s. 2960; Rev., s. 1929; C.S., s. 1646; 2020-75, s. 3(c).)
Editor's Note. - Session Laws 2020-75, s. 4, made the amendment of this section by Session Laws 2020-75, s. 3(c), effective January 1, 2021, and applicable to receiverships commenced on or after that date.
Effect of Amendments. - Session Laws 2020-75, s. 3(c), rewrote the section. For effective date and applicability, see editor's note.
Discharge Under Section Distinguished from Release Under G.S. 23-32. - See Grimes v. Miller, 429 F. Supp. 1350 (M.D.N.C. 1977), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473 (1977).
Debt Is Not Discharged. - The discharge of the principal, under the insolvent debtor's law, is not a discharge of the debt. Norment v. Alexander, 32 N.C. 71 (1849).
Protects against Those Notified. - The discharge of an insolvent protects him from arrest by those creditors only who had notice of his intention to apply for a discharge. Crain v. Long, 14 N.C. 371 (1832); Norment v. Alexander, 32 N.C. 71 (1849); Rountree v. Waddill, 52 N.C. 309 (1859). See note to G.S. 23-32.
ARTICLE 5. General Provisions under Articles 2, 3, and 4.
§ 23-39. Superior or district court tries issue of fraud.
In every case where an issue of fraud is made up as provided in this Chapter, the case shall be entered in the trial docket of the superior or district court, and stand for trial as other causes; and upon a finding by the jury in favor of the petitioner the judge shall discharge the debtor; if the finding is against the petitioner he shall be committed to jail until he makes full disclosure.
(1868-9, c. 162, s. 8; Code, s. 2949; Rev., s. 1935; C.S., s. 1647; 1971, c. 1190, s. 5.)
Upon the suggestion of fraud an issue is raised which should be entered upon the trial docket of the superior court and stand for trial as other causes. State v. Parsons, 115 N.C. 730, 20 S.E. 511 (1894).
Issue Can Be Made Up When Schedule Shows Deed of Trust. - When one who applies to take the insolvent debtor's oath, upon rendering a schedule, sets forth in his schedule that he has made a deed in trust of certain property to satisfy certain creditors,
and surrenders all his interests in the property mentioned in such deed, it is still competent for the opposing creditor to have an issue made up whether the said deed is not fraudulent, and if found fraudulent by a jury, to cause
the debtor to be imprisoned until he surrenders the property itself. Adams v. Alexander, 23 N.C. 501 (1841).
When Jury Finds Deed Fraudulent, Debtor Is Imprisoned Until Property Surrendered. - Where an insolvent debtor, in filing his schedule, only surrenders his interest in certain property, conveyed by a deed in trust, and the jury, upon an issue, finds the
deed fraudulent, he must be imprisoned until he makes a surrender of the whole property so conveyed. Hutton v. Self, 28 N.C. 285 (1846).
§ 23-40. Insolvent released on giving bond.
Every debtor entitled under the provisions of this chapter to discharge as an insolvent may, at the time of filing his application for a discharge or at any time afterwards, tender to the sheriff or other officer having his body in charge, a bond, with sufficient surety, in double the amount of the sum due any creditor or creditors at whose suit he was taken or charged, conditioned for the appearance of such debtor before the court where his petition is filed, at the hearing thereof, and to stand to and abide by the final order or decree of the court in the case. If such bond be satisfactory to the sheriff, he shall forthwith release such debtor from custody.
(R.C., c. 59, s. 27; 1868-9, c. 162, s. 17; Code, s. 2958; Rev., s. 1936; C.S., s. 1648.)
Cross References. - As to surety company being sufficient surety, see G.S. 58-73-5.
When Bond May Be Given. - The insolvent may give bond during the pendency of and until the final determination of the proceedings. Howie v. Spittle, 156 N.C. 180, 72 S.E. 207 (1911).
Sufficient Condition. - A condition "to appear and claim the benefit of the act, etc., and not depart without leave," is substantially the same as that prescribed by this section. Mooring v. James, 13 N.C. 254 (1829).
Who Prepares Bond. - Whether it is the duty of the officer or the defendant to prepare the bond to be given for the defendant's appearance, quaere. Winslow v. Anderson, 20 N.C. 1 (1838).
Day for Appearance Must Be Certain. - The bond for the defendant's appearance, under this section, is in the nature of process to compel an appearance, and the day stated in the condition for appearance must be certain. Winslow v. Anderson,
20 N.C. 1 (1838).
Where Date in Bond Erroneous. - Where a bond was conditioned for the defendant's appearance at the next term of court to be held upon a stated day, and, at the next term which sat at a date earlier than that mentioned in the bond, the defendant did not
appear, it was error to take a judgment against him and his surety for default since there was no default of appearance according to the bond. Winslow v. Anderson, 20 N.C. 1 (1838).
Amount of Bond. - A bond given under this section for the appearance of an insolvent to court is good if it is for double the original debt, exclusive of interest and costs, and judgment, on motion may be rendered on it. Williams v. Yarbrough,
13 N.C. 12 (1828).
Defendant Cannot Object to Bond. - A defendant who has given bond under this section cannot object to the informality of the bond and pray a discharge on account thereof. Page v. Winningham, 18 N.C. 113 (1834).
Nor to Ca. Sa. While Released on Bond. - Where a defendant gives bond under the insolvent act, and while he is at large by virtue thereof, he is not entitled to his discharge on account of the fact that the ca. sa. is voidable; nor can he move, under
such circumstances, to quash the proceedings on that account. Bryan v. Brooks, 51 N.C. 580 (1859).
Defendant Bound to Attend Every Term. - The defendant in a ca. sa. bond given under this section is bound to attend at every term until the cause is finally disposed of. Arrington v. Bass, 14 N.C. 95 (1831).
Condition Is Broken by Default After Continuance. - Where the defendant in the ca. sa. appeared at the return day of the writ, and upon an issue being made up, the cause was continued, and afterwards the defendant made a default, it was held that the
condition of the bond was broken and the plaintiff entitled to judgment. Mooring v. James, 13 N.C. 254 (1829).
§ 23-41. Surety in bond may surrender principal.
The surety in any bond conditioned for the appearance of any person under this chapter may surrender the principal, or such principal may surrender himself, in discharge of the bond, to the sheriff or other officer of any court where such principal is bound to appear, in the manner provided in the chapter entitled Civil Procedure, article Arrest and Bail.
(1793, c. 100, s. 7, P.R.; c. 380, s. 1, P.R.; 1822, c. 1131, s. 3, P.R.; R.C., c. 59, s. 23; 1868-9, c. 162, s. 22; Code, s. 2963; Rev., s. 1937; C.S., s. 1649.)
Cross References. - As to exoneration of bail in arrest and bail, see G.S. 1-433.
As to surrender of defendant by bail, see G.S. 1-434.
As to arrest of defendant by bail, see G.S. 1-435.
Right of Person Surrendered. - A person who is surrendered in discharge of his bail is entitled to the benefit of this chapter for the relief of insolvent debtors. Smallwood v. Wood, 19 N.C. 356 (1837).
Where Surrender to Be Made. - Sureties to a ca. sa. bond, to protect themselves by a surrender of their principal, must make it in the court to which the ca. sa. is returnable, or to the sheriff of that county; where the writ issues to another county,
a surrender to the sheriff of it is a nullity. Mooring v. James, 13 N.C. 254 (1829).
Invalid Surrender. - Where a prisoner was brought into open court by his bail, and it was announced, publicly, that he had surrendered, but was unknown to the sheriff, to the plaintiff, and to the plaintiff's counsel, and he was a stranger to all present,
except to the bail and the presiding judge, and upon being ordered in custody, he fled from the courtroom and escaped, without having been in the custody of the sheriff, it was held that these facts did not amount to a valid surrender.
Rountree v. Waddill, 52 N.C. 309 (1859).
Surrender Cannot Be Made After Judgment Against Surety. - When the principal obligor in a bond is regularly called at court, and, failing to appear, judgment is rendered against him and his surety, the surety has no right ex debito justitiae to come in
on a subsequent day of the term and have the judgment set aside, in order to allow him to make a surrender of his principal. Reynolds v. Boyd, 23 N.C. 106 (1840).
§ 23-42. Creditor liable for jail fees.
When any debtor is actually confined within the walls of a prison, on an order of arrest in default of bail or otherwise, the jailer must furnish him with necessary food during his confinement, if the prisoner requires it, for which the jailer shall have the same fees as for keeping other prisoners. If the debtor is unable to discharge such fees, the jailer may recover them from the party at whose instance the debtor was confined. And at any time after the arrest, the sheriff or jailer may give notice thereof to the plaintiff, his agent or attorney, and demand security of him for the prison fees that accrue after such notice, and if the plaintiff fails to give such security then the sheriff may discharge the debtor out of custody.
(1773, c. 100, ss. 8, 9, P.R.; 1821, c. 1103, P.R.; R.C., c. 69, s. 5; 1868-9, c. 162, s. 24; Code, s. 2965; Rev., s. 1938; C.S., s. 1650.)
Common-Law Provision. - By the common law an imprisoned debtor was obliged to support himself, and, if unable to do so, was dependent upon the humanity of the jailer or of others. Veal v. Flake, 32 N.C. 417 (1849).
Effect of Section. - Where a man had been arrested and the issue had been continued from term to term, and his sureties had from time to time surrendered him and the issue had been decided against him and he had been committed to prison in all these cases,
at the instance of the creditor, it was held that under this section the creditor was responsible to the jailer for his fees or allowance for the food furnished to the prisoner during the whole time he was confined in jail. Veal
v. Flake, 32 N.C. 417 (1849).
Where Prison Bounds Allowed. - When a debtor is committed to prison, and is permitted to take the prison bounds, the jailer is not under any obligation, while he continues in the bounds, to furnish him provisions for his support, nor, of course, can the
creditor, at whose suit he is confined, be compelled to reimburse the jailer for any sum so expended. Phillips v. Allen, 35 N.C. 10 (1851).
Sheriff Cannot Bring Action. - The action against the creditor for the jail fees of an insolvent debtor, given by this section to the jailer, cannot be maintained by the sheriff as the jailer's principal. Bunting v. McIlhenny,
61 N.C. 579 (1868).
§ 23-43. False swearing; penalty.
If any insolvent or imprisoned debtor takes any oath prescribed in this chapter falsely and corruptly, that person is guilty of a Class I felony, and he shall never after have any of the benefits of this chapter, but may be sued and imprisoned as though he had never been discharged.
(1793, c. 100, s. 10, P.R.; R.C., c. 59, s. 25; 1868-9, c. 162, s. 23; Code, s. 2964; Rev., ss. 1940, 3614; C.S., s. 1651; 1993, c. 539, s. 1263; 1994, Ex. Sess., c. 24, s. 14(c).)
§ 23-44. Powers of trustees hereunder.
Any trustee appointed under the last four articles of this chapter, as therein contemplated, is hereby declared a trustee of the estate of the debtor, in respect to whose property such trustee is appointed for the benefit of creditors, and is invested from the time of appointment with all the powers and authority, and subject to the control, obligations and responsibilities prescribed by law in relation to personal representatives over the estates of deceased persons; but all debts shall be paid by the trustees pro rata.
(1773, c. 100, ss. 5, 6, P.R.; 1827, c. 44; 1830, c. 26, s. 2; R.C., c. 59, ss. 21, 22; 1868-9, c. 162, s. 44; Code, s. 2977; Rev., s. 1941; C.S., s. 1652.)
§ 23-45. Jail bounds.
Any imprisoned debtor may take the benefit of the prison bounds by giving security, as required by law, except as follows:
- A debtor against whom an issue of fraud is found.
- Any debtor who, for other cause, is adjudged to be imprisoned until he makes a full and fair disclosure or account of his property.
(1818, c. 964, P.R.; R.C., c. 59, s. 27; 1868-9, c. 162, s. 25; Code, s. 2966; Rev., s. 1942; C.S., s. 1653.)
ARTICLE 6. Practice in Insolvency and Certain Other Proceedings.
§ 23-46. Unlawful to solicit claims of creditors in proceedings.
It shall be unlawful for any individual, corporation, or firm or other association of persons, to solicit of any creditor any claim of such creditor in order that such individual, corporation, firm or association may represent such creditor or present or vote such claim, in any bankruptcy or insolvency proceeding, or in any action or proceeding for or growing out of the appointment of a receiver, or in any matter involving an assignment for the benefit of creditors.
(1931, c. 208, s. 1.)
Cross References. - As to restrictions on appearance for creditor in insolvency proceedings, see G.S. 84-9.
Legal Periodicals. - See 9 N.C.L. Rev. 348 (1931).
§ 23-47. Violation of preceding section a misdemeanor.
Any individual, corporation, or firm or other association of persons violating any provision of G.S. 23-46 shall be guilty of a Class 1 misdemeanor.
(1931, c. 208, s. 3; 1993, c. 539, s. 399; 1994, Ex. Sess., c. 24, s. 14(c).)
ARTICLE 7. Bankruptcy of Taxing, etc., Districts, Counties, Cities, Towns and Villages.
§ 23-48. Local units authorized to avail themselves of provisions of bankruptcy law.
With the approval of the Local Government Commission of North Carolina and with the consent of the holders of such percentage or percentages of its indebtedness as may be required by Public Act Number three hundred two of the Seventy-fifth Congress, First Session, entitled "An Act to amend an Act entitled 'An Act to establish a uniform system of bankruptcy throughout the United States' approved July first, one thousand eight hundred ninety-eight and Acts amendatory thereof and supplementary thereto," approved August sixteenth, one thousand nine hundred thirty-seven, as amended, any taxing district, local improvement district, school district, county, city, town or village in the State of North Carolina is authorized to avail itself of the provisions of said act of Congress as said act now exists or may be hereafter amended.
(1939, c. 203.)
Legal Periodicals. - For comment on this section, see 17 N.C.L. Rev. 343 (1939).
Cited in Cash v. Granville County Board of Educ., 242 F.3d 219 (4th Cir. 2001).